Reserves & Resources

Mineral Resources and Ore Reserves

In 2013 Syrah announced the largest resource of graphite the world had ever seen at 1.05Bt @10% Total Graphitic Carbon (TGC) and 0.23%V2O5 (using a 5%TGC cut-off to 300m depth).

Resource calculations have undergone several iterations. The following list of statements regarding the Resources and Reserves were released to the ASX:

  • 29 May 2015 – Syrah Finalises Balama Graphite Feasibility Study and Declares Maiden Ore Reserve
  • 25 March 2014 – Balama East Upgraded Resource
  • 10 December 2013 – Balama West Resource Upgrade and Clarification
  • 27 May 2013 - Maiden Balama East Resource – Balama Now Contains Over One Billion Tonnes of Graphite Resource at 10.2%TGC and 0.23% V2O5
  • 23 January 2013 - Maiden Balama West Mineral Resource – World’s Largest Graphite Deposit with Significant Vanadium

To date, over 18,000m of resource diamond core drilling has been completed on the Balama Project. As part of the Feasibility Study, a Mineral Resource estimate using a 3% TGC cut-off (constrained within a pit shell) has been determined by Snowden as shown in the following table and was completed in accordance with the guidelines of the JORC Code 2012. The extent of these resource categories can be seen in the following maps for Balama West and Balama East

Classification Tonnes (Mt) Density (t/m3) TGC (%) Contained Graphite (Mt)
Balama West        
Measured 75.0 2.5 11.0 8.4
Indicated 111.0 2.6 8.1 9.1
Inferred 460.0 2.7 11.0 51.0
Balama East        
Indicated 76.0 2.6 14.0 11.0
Inferred 470.0 2.7 10.0 49.0
Total        
Measured 75.0 2.5 11.0 8.4
Indicated 186.0 2.6 11.0 20.1
Inferred 930.0 2.7 11.0 100.0

The Proved and Probable Ore Reserve estimated by Snowden as part of the Feasibility Study is based on, and inclusive of, the above Measured and Indicated Mineral Resources.

Accordingly, the Balama Project contains a combined Proved and Probable Reserve of 81.4Mt at an average grade of 16.2% TGC (using a 9% TGC cut-off grade). This reserve constitutes 13.2Mt of contained graphite, making the Balama Project the world’s largest Reserve of graphite. Snowden notes that the deposit is open along strike at both Balama East and Balama West, as well as at depth.

Classification Ore (Mt) TGC (%) Contained Graphite (Mt)
Balama West      
Proved 20.0 19.2 3.8
Probable 2.6 17.5 0.4
SUB TOTAL 22.6 19.0 4.2
Balama East      
Probable 58.0 15.1 8.9
SUB TOTAL 58.0 15.1 8.9
Total      
Proved 20.0 19.2 3.8
Probable 61.4 15.2 9.3
  81.4 16.2 13.1

Based on the projected average annual production over the life of mine as outlined in the Feasibility Study, there are sufficient Ore Reserves for over 40 years of production (after project ramp up).

A detailed statement of the Mineral Resources and Ore Reserves for the Balama Project can be found in the ASX announcement by the Company dated 29 May 2015.

Feasibility Study

During May 2015, the Feasibility Study for the Balama Project was finalised. The author and key contributor of the Feasibility Study was Snowden Mining Industry Consultants (Snowden), with input from other technical specialists. A Front End Engineering Design (FEED) study in July 2015 by CPC Engineering Pty Ltd (CPC Engineering) subsequently provided an updated initial capital expenditure estimate and confirmed processing plant operating costs to be consistent with the Feasibility Study estimates.

The Balama Project is a simple, open-pit mining operation with a low strip ratio. Operations will commence as free-dig mining within the high grade pits of Balama West, using conventional truck and shovel mining. The key operational and financial metrics of the Balama Project, as per the 2015 Feasibility Study are summarised in the following table:

Metric  
Operational period 42 years
Plant feed rate 2,000,000 tpa
Average strip ratio (life of mine) 0.04 ratio (1)
Average head grade (life of mine) 16.2% (2)
Average recovery (life of mine) 92.5%
Average productions (life of mine) – 95% TGC 313,000 tpa (3)
Total initial capital expenditure (including 10% contingency) US$144 million (4)
Average operating cash costs over life of mine (5) US$286/t product (FOB) (6)

(1) Inclusive of economic low grade ore ranging from > 2% to < 9% which will be stockpiled for processing in the future.

(2) Whilst this is the average for the life of mine, head grade will be approximately 19% TGC during the first 10 years of production.

(3) Whilst this is the average for the life of mine, production will be approximately 355,000 tonnes during the first 10 years of production.

(4) Updated initial capital expenditure estimate (including a 10% contingency) provided by CPC Engineering

(5) Excluding royalties and taxes.

(6) FOB Port of Nacala